[2025] SGHC 27: Key Bankruptcy Case Every Business Owner & Creditor in Singapore Must Know

Breaking Down Singapore High Court’s Landmark Ruling on Jannie Chan’s Bankruptcy 

Are you a business owner, director, creditor, or legal professional dealing with debt recovery, bankruptcy disputes, or corporate mismanagement?

In [2025] SGHC 27, the Singapore High Court ruled on a high-stakes bankruptcy case involving Jannie Chan Siew Lee, co-founder of The Hour Glass, setting powerful legal precedents on:

• Debt enforcement & creditor rights
• Director fiduciary duties & corporate liability
• Proof of debt challenges in insolvency cases

This article is your ultimate guide to understanding what happened, why it matters, and how it impacts bankruptcy law, creditors, and directors in Singapore.

What Happened? A Quick Overview of SGHC 27/2025

 This case involved multiple legal disputes over unpaid debts and alleged financial mismanagement:

SME Care Pte Ltd sued to enforce a loan default through a consent judgment.

Fulcrum Distressed Partners Ltd (FDPL) challenged the rejection of S$18M debt claims linked to misused company funds.

Jannie Chan fought back, trying to invalidate debts against her bankrupt estate.

3 Major Legal Issues Decided by the Singapore High Court

1. Enforceability of Debt – Can a Loan Be Challenged After a Settlement?

Issue: Jannie Chan claimed the loan from SME Care Pte Ltd was “extortionate” and signed under duress.

Court’s Decision: The consent judgment stands. Once a debt is legally settled, it’s binding unless overturned through fraud claims.

Key Takeaway: Debt agreements and consent judgments are FINAL unless you prove fraud.

2. Director’s Fiduciary Duties – Can You Be Liable for Related-Party Transactions?

Issue: FDPL claimed that S$15.77M in transfers from TGPL to TL were unauthorized loans with no business benefit, breaching fiduciary duties.

Court’s Decision: The transactions were NOT legitimate, and the director failed to protect creditor interests.

Key Takeaway: Directors must ensure ALL company transactions benefit the business – related-party deals can land you in court.

3. Challenging Proof of Debt – Can You Overturn a Bankruptcy Claim?

Issue: Jannie Chan tried to dismiss two debts:

Jannie Sum (S$1.36M) – Receivables she allegedly took over.

Purported Repayment (S$1.28M) – A “loan repayment” to herself.

Court’s Decision: Her objections were dismissed. She failed to provide credible evidence proving these debts were invalid.

Key Takeaway: If you’re bankrupt, your financial records must be watertight – vague explanations won’t help.

Why This Case Matters for Business Owners & Creditors in Singapore

For Directors & Business Owners – Mismanaging company funds can lead to personal legal liability, even in bankruptcy.

For Creditors & Investors – Courts uphold creditor rights and enforce legally binding debts, making debt collection more secure.

For Insolvency Professionals – The case reinforces the power of private trustees in adjudicating proof of debt disputes.

How This Case Impacts Debt Recovery & Corporate Governance in Singapore

Can directors escape liability in bankruptcy? No. Even after liquidation, directors can be held accountable for past financial mismanagement.

Can creditors enforce debts post-bankruptcy? Yes. As long as you have strong documentation, your claims will stand.

How should businesses handle loan disputes? Ensure legally valid contracts – loans with clear repayment terms will be enforceable in court.

If you’re a creditor, director, or business owner involved in:

• Debt recovery disputes
• Company insolvency & bankruptcy proceedings
• Fiduciary duty investigations

Consult a corporate litigation lawyer ASAP.

Need expert legal advice? Contact IRB Law LLP a leading Singapore law firm

The Future of Bankruptcy Law in Singapore

The [2025] SGHC 27 ruling is a powerful reminder that:

• Corporate directors are accountable for ALL financial decisions.
• Creditors CAN enforce legitimate debts, even in bankruptcy.
• Fiduciary duty breaches have serious legal consequences.

For businesses, understanding bankruptcy law is no longer optional – it’s a necessity. Stay informed, protect your assets, and always act in good faith.

Know someone dealing with corporate insolvency, debt collection, or bankruptcy proceedings? Send them this must-read guide today.